Vodafone-Idea merger: Shares of Idea Cellular closed 4.57 per cent higher at Rs. 57.35 on the Bombay Stock Exchange (BSE) after the news.
The merger, announced in March 2017, will topple current market leader Bharti Airtel.
HIGHLIGHTS
- Department of Telecom gives final nod to Vodafone, Idea Cellular merger
- At 3:15 pm, Idea Cellular shares were trading 4% higher
- The combination will create India's largest mobile-phone company
PROMOTED
The Department of Telecom (DoT) has given final approval to the merger of Vodafone India and Idea Cellular, news agency Press Trust of India (PTI) reported, citing government sources. The nod for Vodafone Idea came days after Idea Cellular and Vodafone India jointly paid Rs. 7,268.78 crore 'under protest' to the DoT. The entities will now approach Registrar of Companies (RoC) for stipulated filings for approval, completing the last leg of formalities, PTI said, citing a senior DoT official. Shares of Idea Cellular closed 4.57 per cent higher at Rs. 57.35 on the Bombay Stock Exchange (BSE), whose benchmark index Sensex gained 140 points to end at 36,984.64.
The combination, to be known as Vodafone Idea, will create India's largest mobile-phone company and help the firms compete with billionaire Mukesh Ambani's Reliance Jio Infocomm Ltd., which upended the world's second-largest mobile-phone market by offering free calls and cheap data.
Idea has reported losses every quarter since Mukesh Ambani-led Reliance Jio started its services in September 2016.
The merger, announced in March 2017, will topple current market leader Bharti Airtel Ltd. and create a behemoth with 438.8 million subscribers.
The move comes days before Idea's first quarter report, which is scheduled for Monday, July 30.
Kumar Mangalam Birla, chairman of Aditya Birla Group, will be the non-executive chairman while Balesh Sharma, currently chief operating officer of Vodafone India, will be the CEO of Vodafone Idea.
COMMENT
The merger follows a broader trend by domestic network operators which are rushing to consolidate amidst a year-long price war sparked by the entry of Reliance Jio. (With Agencies Inputs)
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